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The Trade-Off Between Child Labor and Schooling: Influence of Social Labeling NGOs in Nepal


  • Chakrabarty, Sayan
  • Grote, Ulrike
  • Lüchters, Guido


Does the labeling of products which have been produced without any child laborers contribute to increased welfare of children? This paper presents some results of a survey in Nepal conducted to analyze which factors determine the probability of a child to work, and to examine the influence of non governmental organizations (NGOs) which are engaged in social labeling, on the incidence of child labor and child schooling. Data were obtained from interviews with 410 households of Kathmandu Valley in Nepal. The results of the econometric analysis show that the probability of child labor (i) decreases if the carpet industry has implemented a labeling program, (ii) decreases if the adult’s income increases (‘luxury axiom’), (iii) decreases if the head of the household is educated, (iv) increases with the age of the head of the household, and (v) is increased in the presence of more children (aged 5-14) in the household. It can also be shown that labeling NGOs have a significant positive influence on sending the ex-child laborers to school.

Suggested Citation

  • Chakrabarty, Sayan & Grote, Ulrike & Lüchters, Guido, 2006. "The Trade-Off Between Child Labor and Schooling: Influence of Social Labeling NGOs in Nepal," MPRA Paper 4096, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:4096

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    Cited by:

    1. Doytch, Nadia & Thelen, Nina & Mendoza, Ronald U., 2014. "The impact of FDI on child labor: Insights from an empirical analysis of sectoral FDI data and case studies," Children and Youth Services Review, Elsevier, vol. 47(P2), pages 157-167.

    More about this item


    Child labor; Schooling; Social labeling; Kathmandu Valley;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access


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